CarrAmerica ( CRE), a national office building owner, agreed to be acquired by an affiliate of the Blackstone Group in a deal valued at $5.6 billion. CarrAmerica has been the subject of much M&A rumor over the past month. Under the terms of the agreement announced Monday morning, Blackstone will pay $44.75 per share of the real estate investment trust, which represents a 9% premium to where CarrAmerica's shares closed Friday. CarrAmerica's board unanimously approved the merger, which is expected to occur in the second quarter, contingent on stockholder approval. Upon closing, Blackstone will liquidate the surviving corporation in the merger. CarrAmerica owns office properties in 12 markets throughout the U.S., with a portfolio of 285 properties in markets such as San Francisco, Los Angeles and Washington, D.C. Holders of the REIT's 7.5% preferred stock will receive $25 per share in cash plus an accrued but unpaid dividend. Common limited partnership interests in two of CarrAmerica's operating partnerships will be paid $44.75 per unit. "CarrAmerica has dedicated the last 13 years to building an exceptional public commercial real estate company on behalf of its stockholders," said CarrAmerica Chairman and CEO Thomas A. Carr in a statement. "Over the past few years, CarrAmerica has emerged as a leader in its markets with growing occupancy, a markedly upgraded portfolio of office properties and a very dedicated and talented organization. And yet, with our most aggressive performance assumptions, we don't believe we could match the value being offered to our shareholders today by this offer. We believe this transaction will allow us to fulfill our mission with our stockholders and also create new opportunities for growth and success for CarrAmerica as we go forward." Jonathan D. Gray, senior managing director of the Blackstone Group, said, "We feel extremely fortunate to have the opportunity to acquire CarrAmerica. The company represents one of the premier collections of people and properties in the country and will provide us with a valuable platform for future investments in the office sector." Goldman, Sachs & Co. acted as financial adviser to CarrAmerica. Citigroup, Bank of America and Deutsche Bank acted as financial advisors to Blackstone. Acquisition financing is being provided to Blackstone by Deutsche Bank, Bank of America and Citigroup. Hogan & Hartson LLP acted as legal adviser to CarrAmerica. Simpson Thacher & Bartlett LLP acted as legal adviser to Blackstone.